Reliance Infra – Electricity Bill Updates & Tata Power

There has been an interesting addition in the center of the Reliance Energy(RInfra) Bills that once receives in Mumbai on a monthly basis. The section appears in a nice yellow sticky note type demarcated area & reads as “To protect the interest of 22 lakh residential consumers of Rinfra, MERC in its order dated 29th Jul 2011 has mentioned that all consumers who have migrated to Tata Power (TPower) and use RInfra network, will have to pay cross subsidy and their share of Regulatory assets.”

Saw this in the bill that came in for the month of September 2011 (seen in October 2011) and kept me thinking, what does it means ? Looks like the incentive of migrating over to TATA Power, which claims of a lower tariff, would no longer be that lucrative. Though on paper the tariff would be different, looks like RInfra would charge TPower which in turn would charge the consumers a charge for the last mile connectivity. TATA does not have the last mile connectivity across the city and primarily depends on RInfra infrastructure to reach to domestic end customers.

RInfra had petitioned the regulator MERC (Maharashtra Electricity Regulatory Commission) & the MERC order states

(A) Accumulated Recovery (Regulatory Assets) : MERC has approved the Regulatory Assets of Rs 2,316 crore created owing to staying of tariff order and adjustment of various costs in the process of review by MERC (process of Truing-up) for the period of 2007 to 2011. Regulatory Asset will be recovered from all the consumers who are connected to RInfra’s network including those supplied by Tata Power.

(B) Carrying Cost : The recovery of Regulatory Assets will also attract the carrying cost at rate of SBI PLR till these amounts are recovered.

(C) Cross Subsidy Surcharge : In Mumbai, the commercial and Industrial consumers subsidise the residential consumers. The migration of predominantly high end consumers to Tata Power results into potential tariff shock to residential consumers. In view of this, MERC has allowed a levy of Cross Subsidy Surcharge on all Tata Power consumers using Rinfra network. MERC also a state that this surcharge will be applicable from the date consumer has shifted to Tata Power.

I presume from this that from an end customer perspective whether they stay with RInfra or moves to TPower, the bill amount might end up being the same.

A local agent (who helps you to migrate from R to T, at a fee) mumbles that the savings would be for those households who consume more than 300units a month consistently. :-) … Would try to find a new comparison table and see if this hold true.

Extract from the bill